A company purchased furniture on January 1. Its cost was $15,600, and it had a residual value of $3,600. Its useful life is determined to be 8 years. Using double-declining balance depreciation, the depreciation for year 1 to the nearest dollar will be:

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Quizplus · Accepted Answer

The double-declining balance depreciation rate is 2/(useful life of the asset). Here, it's 2/8 = 25% per year. The depreciation for the first year is 25% of $15,600, which equals $3,900.

A Company Purchased Furniture on January 1